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new and apparently lucrative investment for this
paper, so as to prevent its returning upon the bank
to be exchanged for specie. The latter plan ap-
peared at last the preferable one. A colossal estab-
lishment was projected with a capital equal in
amount to the public debt. This capital was to be
divided into shares, which the regent was to buy
with the paper-money that he was to manufacture;
he was then to borrow this paper anew to pay the
creditors of the state; and then by selling the shares,
to retire the paper-money, and thus transfer the
creditors of the state to the company.
Accordingly in May, 1719, the East India Com-
pany, established by Richelieu in 1664, the affairs of
which were then at a very low ebb, was incorporated
with that of the West Indies; and the conjoined
companies received the name of the Company of the
Indies, "with the four quarters of the world to trade
in." "Moreover," says the edict issued on this
occasion, "beside the 100,000,000 of public debts
already subscribed into the Western Company's
capital, there shall be a new subscription of 50,000
shares of 550 livres each, payable in specie." In a
short time the newly created company engaged, by
extending its capital to 624,000 shares, to lend the
king the immense sum of 1,600,000,000, at three
per cent, interest, and declared itself in a condition
to pay a dividend of 200 livres upon each share.
The public faith being yet unshaken, the shares here-
upon rose to 5000 livres; and when the king began
to pay off the state-creditors with the loan now pro-
cured, many not knowing how to employ their capi-
tal, a new competition for shares in the great com-
pany arose, and shares actually rose in consequence
to 10,000 livres. The slightest consideration might
have served to convince any cool speculator that the
company had come under engagements which, in no
circumstances however prosperous, it could fulfil.
How was it possible that the company could raise
annually 124,800,000 livres for the dividend upon
624,000 shares? Or supposing it able to make an
annual dividend of 200 livres a share, still the rate
of interest being at this time about four per cent.,
the shareholder who had bought in at 10,000 thus
lost one-half of the revenue he might otherwise have
drawn from the employment of his capital. The
truth is, the whole scheme was designed for the sole
purpose of relieving the state from its debts by the
ruin of its creditors; but the immense fortunes which
were realized by stock-jobbing at the very outset of
the scheme led on others to engage in the same
speculation; splendid fortunes were realized in the
course of a single day; men found themselves sud-
denly exalted, as if by the wand of an enchanter, from
the lowest station in life to the command of princely
fortunes; 1200 new equipages appeared on the streets
of Paris in the course of six weeks, half a million of
people hastened from the country, and even from
distant kingdoms, to procure shares in the Indian
Company; and happy was he who held the greatest
number of these bubbles. The negotiations for the
sale and purchase of shares were at first carried on
in the Rue Quincampoix, where fortunes were made
by letting lodgings to the crowds who hastened
thither for the purpose of speculating in the stocks.
The murder of a rich stock-jobber, committed here
on the 22d of March, 1720, by a young Flemish
nobleman, occasioned the proscription of that street
as a place of business, and the transference of the
stock-jobbing to the Place Vendome, and finally to
the Hotel de Soissons, which Law is said to have
purchased from the Prince of Carignan for the enor-
mous sum of 1,400,000 livres.
Innumerable anecdotes are on record of the extra-
ordinary vicissitudes of fortune which took place
during this season of marvellous excitement; footmen
stepped from the back to the inside of carriages;
cooks appeared at the public places with diamond
necklaces; butlers started their berlins; and men
educated in poverty and of the lowest rank suddenly
exchanged the furniture and utensils of their apart-
ments for the richest articles which the upholsterer
and silversmith could furnish. Law himself, now
arrived summa ad vestigia rerum, shone super-emi-
nent above all the other attractions of the day;
princes, dukes, marshals, prelates, flocked to his
levees, and counted themselves fortunate if they
could obtain a smile from the great dispenser of for-
tune's favours; peeresses of France, in the excess of
their adulations, lavished compliments upon the
Scottish adventurer which set even decency at defi-
ance; his daughter's hand was solicited by princes;
and his lady bore herself with hauteur towards the
duchesses of the kingdom. Land in the neighbour-
hood of Paris rose to eighty or a hundred years' pur-
chase; the ell of cloth of fifteen livres sold for fifty;
coffee rose from fifty sous to eighteen livres; stock-
jobbers were known to treat their guests to green
pease at a hundred pistoles the pint; every yard of
rich cloth or velvet was bought up for the clothing
of the new élèves of fortune; and the value of the
silver-plate manufactured in the course of three
months for supplying the demands of the French
capital amounted to 7,200, 000! The regent, sharing
in the general delusion, wished to place the wonder-
ful foreigner at the head of the finances of the king-
dom; but then, in addition to his being an alien, he
was a Protestant also; so 1'Abbé de Tencin was
charged with the important duty of his conversion,
and this ecclesiastic succeeded so well in the task
assigned to him, that on the 5th of January, 1720,
all obstacles being removed, Law was elevated to
the comptroller-generalship of the finances of France,
and for some time after his elevation to the premier-
ship governed France with almost absolute power.
Law's fame had now reached its acme; his native
city of Edinburgh hastened to transmit to her illus-
trious son the freedom of citizenship in a gold box
of the value of 7300; the Earl of Ilay republished
some of his works with an adulatory preface; British
noblemen disdained not to pay their court to so suc-
cessful an adventurer; even the Earl of Stair, then
the British ambassador at Paris, trembled at the
idea of Law's overweening influence in the affairs of
France, and viewed his boastful speeches in so seri-
ous a light, as to deem them matter of grave com-
munication and advice to his government—a piece
of good faith for which the meritorious and discern-
ing minister met with small thanks.
The great drama, however, which Law was now
enacting before the astonished eyes of all Europe
was soon to shift; the glittering bubble on which he
had fixed the eyes and expectations of all France was
rapidly attenuating to its explosion; the charm by
which he had swayed the mind of the million lay not
in the rod of the magician, but in the implicit faith
which people reposed in the skill and the power of
its master—and, that faith once shaken, the game of
delusion was over.
We have said that the shares of the India Com-
pany had risen to 10,000 livres each in the month of
November, 1719. So long as they kept at this ele-
vation the credit of the bank remained unshaken.
Its notes were found so very convenient in conduct-
ing the rapid negotiations of the Rue Quincampoix,
that they were sought after with avidity, and even
bore a premium of ten per cent, in exchange for
specie! Notwithstanding, however, of the bound-